Ferretti’s Gabriele del Torchio

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Gabriele del Torchio was recently appointed as CEO of the Ferretti Group, which recently reported 2004 - 2005 consolidated sales of €630+ million.

AG-C. China now or ten years ?

G del T. That’s a very interesting question. I believe that China is really a challenge for all of us, including the boat industry. It is a challenge for any sector of the industry in Europe or the so called developed countries. I am really impressed about the improvement that China has made in the last five years, basically. I should say ten years, but the big acceleration has been in the past five years, so they are preparing their future quite well. Now, coming back on the question of the boating industry, I feel that for the moment the market is still quite small but there will be, for sure, a lot of opportunities in the near future. According to the statistics that I have been told, there are nowadays more than 200,000 high net worth individuals and, among these 200,000, at least 50,000 are really high net worth individuals. That means there is a potential market and, more and more, a boat is considered as a privilege, as a really distinctive sign for these rich men, so I believe there will be opportunities. If you look at what kind of assets they are preparing in China you would be astonished, like me, for they are investing huge amounts of money to prepare marinas and then there will be another tremendous boost for our industry at the Olympic Games.

So the answer is probably not exactly today, but in a short time it will become a real opportunity. The Ferretti Group has already sold four boats into China: one Ferretti 460; one Ferretti 500; one Pershing 45' and one Pershing 50'. We have four dealers and Ferretti is opening a Co-ordination Centre in Shanghai. We have people there, we have partners who are Chinese - local people - and that is because we are carefully watching the evolution of the Chinese market.

AG-C. There is a 40 hectare marine site being developed in Shanghai would you be interested in taking part of that development?

G del T. Marine sites are very interesting. There are many marine sites already opened in China and some others will be open soon; we are watching these very carefully. One of them is in the Qindao area, the town where the Olympic games for sailing will be organised next year. In that area the Ferretti dealer is already established and has already opened a showroom.

AG-C. Thirteen new members have joined the European Union do you regard these as a potential sales area, or an opportunity for cheaper manufacturing?

G del T. First of all, I think that the new states that recently joined Europe represent a big opportunity for sales and will become a market to sell, so there is the opportunity to consider these states as a market. As for the possibility of buying components, or to make production there, you know that we are in the luxury segment of the boats and in our segment the “hand crafter” and the care of quality is the most important element, even more than cost, even more than price. We are really obsessed about quality so, for the moment, I do not believe that this part of the world can represent an opportunity to buy components.

AG-C. Hurricane Katrina devastated much of the US Gold Coast. Not withstanding the human loss, do you consider this a disaster, or a potential  sales opportunity once insurance claims are settled?

G del T. Katrina impacted so much on human life, I am really sad for that. My thoughts are for the people that lost their lives there. The situation is still very uncertain, although it is still too early to make any kind of estimation that will represent an opportunity or what else. I prefer for the moment to think of the people that lost their lives and lost their property there.

AG-C. Will rising oil prices have a major impact on sales soon and, perhaps more importantly, on production costs?

G del T. Definitely the rising oil price is impacting the entire economy; impacting the price of many components and we are not an exception. We too have suffered from some price increases due to this oil rise. We are carefully watching the situation. I believe that we should be prepared for a new era, during which the price of oil will remain quite high.

Questions about the Ferretti Group

AG-C. In La Spezia, we spoke about automation in the boating industry. Have you been able to identify any area, in the Ferretti Group, where this could be applied?

G del T. That is a very interesting question and, once again, I should come back to my previous statement about the quality and about the care for customers, so I tell you that in every area where we can make improvements in the brands that guarantees the quality, a good level of quality, we are doing that. We recently installed one of the most advanced 5 axis milling machines in Europe, which will be used to build the wooden models for all the Group’s new yachts; we invested in, probably, the largest machine of its type in Europe This is a good example of the kind of automation that we are installing in ourcompany.

AG-C. We have found some flaws in some of the brand websites, which do not give visitors a good impression. Does this mean that the Ferretti Group does not take Internet exposure seriously?

G del T. It is exactly the opposite, we really believe in the Internet, we believe that the Internet is one of the tremendous weapons; it is a tremendous opportunity for sales. Not only that, it is also a tremendous opportunity to inform, not only our customers, but to inform our stock holders, to inform the market, to inform the community. We build investment in the past with web sites for all our brands. We believe there is probably a need for further improvement and we are working in that direction and we are confident that soon you will see even a more attractive web site for Ferretti.

AG-C. There is dearth of affordable European starter boats today, with the Bénéteau Group being the only big company producing these. Is there a long term danger that boating will become a pastime for only the very rich?

G del T. I am not yet in a position to completely answer this question, but I don’t have this impression. I believe that the market is following two different directions; there is, for sure, the direction for the increase of size and there is, for sure, a direction to develop luxury boats. We at Ferretti Group are more interested in this kind of business, because it is part of our heritage, it is part of our experience, but interest for small boats still exists and is quite interesting for the industry, probably not only Europe. There is a very strong industry in the USA and now starting in the Far East, so I believe  the source will be different in the future from that of the past, but the sector will remain very active.

AG-C. Companies in the Ferretti group are going outside their traditional routes; Riva into mega yachts, Apreamare into a new model that has very little resemblance to a gozzo. Is there a danger that this will dilute, rather than enhance, the brand images?

G del T. The brand diversities are considered one of our main assets; it is considered one of our priorities, it is definitely one of our strategies. So we are very much interested in keeping this diversity and the distinctive elements among the various brands. If you go through our acquisitions and if you consider our acquisitions you will see, for sure, that we decide on acquisitions in order to expand the coverage of the market and there is very little overlapping in the nine brands we have today in the Ferretti Group.

Obviously inside every brand we want to follow, we need to follow, the market trend. That is the reason why some brands are entering into the larger sized boats than in comparison with the past, but that is not completely new. I’ll give you just one example, with Riva probably one of the first companies developing, many years ago, a 36 metre boat. So we are really working again in two directions, one to keep the assets and maintain brand diversity, maintain the identification and distinctive elements among the various brands and, at the same time, follow the market trend. This is probably giving the impression that we risk losing the origin, but it is not exactly what we want; we want to cover the new market but maintain the diversity.

Apreamare

AG-C. To what extent are those nine brands in competition with each other, as much with your rivals?

G del T. Oh that again is a very interesting question and my answer again is simple and very straight. We are not competing one against the other inside the group, not at all; inside the group there is a big coordination. My role, my job, is to coordinate the activity among the brands, including the sales activity, so there is not this risk especial because, and I am coming back on the previous question, our basic philosophy is to cover as much of the market segment as possible.  So we are competing with our competitors, not with each other.

Coming back to your question on Apreamare, for that very reason we are taking Apreamare products to China, because we believe Aprea is a very practical boat and represents a very great opportunity for the Chinese market. 

AG-C. Thank you, Gabriele del Torchio, for talking to BYM News.